With financial markets in the USA closed in observance on the Independence Day, currencies had a very quiet day. Only the British Pound came under some pressure, but other than that the majors seemed to take a day off. That’s not to say nothing took place at all. The Polish Zloty had a decent run up on presidential election news. Following death of the President of Poland in an airplane disaster three months ago, new head of state was elected yesterday. Bronislaw Komorowski won the office, though by a fairly slim margin.

Mr. Komorowski is seen as a supporter of market reforms. He is expected to continue policy fiscal consolidation and budgetary debt reduction. This should lead to adoption of the Euro by Poland. It is probably way too early to talk about any timetable, but if earlier plans called for 2015 as a target year, perhaps now markets are a little more optimistic. Joining the Euro might become a subject a national referendum rather than a straight government decision, with an uncertain outcome. Today, however, PLN gained on the common currency.

Things should pick up on Tuesday. Tight holiday ranges are typically followed by days with much more activity. For starters, the Reserve Bank of Australia will have interest rates announcement in a few hours. No change is expected and only surprise would be a hike in rates. If that doesn’t happen, the AUD will likely get weaker. Language of the statement might have some influence over the Aussie, but it is secondary to the action/no action by the RBA.

Just like many other pairs, the USD-CHF had a very narrow range day. Chances are that we will have a directional move here. As I’ve done before in similar situations, a straddle order is a play of the day, with red lines indicating buy and sell levels. These trades will have firm stops of 50 pips on both sides, while the target is 150 pips. If the objective is not reached, trade will be closed no later than 17:00 EST tomorrow. Whichever comes first.

Mike K.